PG&E Receives Subpoena in San Francisco Corruption Probe

(Bloomberg) -- San Francisco’s city attorney said he has issued subpoenas to bankrupt utility giant PG&E Corp. and seven other entities as part of a widening corruption probe that has already forced the resignation of a top local official.

The subpoenas -- to PG&E, three construction companies, a recycling business and three nonprofits -- follow the resignation Monday of San Francisco’s head of public works, Mohammed Nuru, who was arrested by the Federal Bureau of Investigation in January. A prominent local restaurateur, Nick Bovis, was also arrested.

Dennis Herrera said in a statement his office believes the companies and nonprofits targeted by the subpoenas may have been involved in “funneling donations to fund city programs and events,” including holiday parties for the public works department.

“We’re following the facts, and we’re following the money,” Herrera said in the statement.

PG&E acknowledged receiving the subpoena, and a spokesman said the company was reviewing it before determining how to respond.

“PG&E and its employees work hard every day to uphold both the letter and spirit of the law and the company’s own ethical standards,” spokesman Matt Nauman said in an email.

Federal officials have accused Nuru and Bovis of conspiring to steer city contracts to Bovis. Nuru is also accused of accepting gifts from a Chinese developer for help with a construction project in San Francisco.

The subpoenas come as the city is trying to buy PG&E’s local equipment and take over delivering electricity in the utility’s hometown. The company, which filed for bankruptcy last year facing $30 billion in wildfire liabilities, has refused the offer.

PG&E shares declined 5.75% Wednesday to close at $16.87.

To contact the reporter on this story: David R. Baker in San Francisco at dbaker116@bloomberg.net

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Reg Gale, Pratish Narayanan

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